The U.K. Financial Conduct Authority has published the terms of reference (dated June 2018) for the pilot phase of its Digital Regulatory Reporting project. The FCA is working with the Bank of England in the RegTech sphere to explore ways of using technology to link regulation, compliance procedures and firms' policies and standards together with firms' transactional applications and databases.

The FCA published a Call for Input in February 2018 following a TechSprint in November 2017, at which a 'proof of concept' was achieved, showing that it was feasible to make regulatory reporting requirements machine readable and executable. Using this "Digital Regulatory Reporting" would allow firms to map their regulatory requirements directly to the data that they hold. Potential benefits include automated, straight-through processing of regulatory returns, greater accuracy in data submissions and faster implementation of changes in regulatory requirements, as well as cost reduction and improvements to competition.

The pilot is running for six months from June 2018 and will build on the proof of concept. Participants include five banks, a building society and two universities. The pilot will consider two use cases, one focused on retail reporting and one focused on wholesale reporting. The terms of reference for the pilot explain that a minimum viable product will be developed so that the potential benefits of machine readable and executable regulatory reporting can be evaluated. The scope of work during the pilot will address: (i) data modelling and removal of regulatory ambiguity; (ii) the delivery mechanism for codified regulations; and (iii) policy, legal and governance challenges. A dedicated Digital Regulatory Reporting webpage contains a timeline of the project's milestones.

The FCA intends to publish a feedback statement in Q3 2018, which will bring together the results of the February Call for Input and industry discussions. The findings of the pilot phase will be published in early 2019.

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